Toronto-Dominion Bank reportedly near deal to buy Chrysler Financial

Toronto-Dominion Bank is near an agreement to buy Chrysler Financial, the lender once owned by the third-largest U.S. automaker, from Cerberus Capital Management, said three people with knowledge of the matter.

Toronto-Dominion may announce a deal as soon as Tuesday morning, said the people, who spoke on condition of anonymity because the talks are private. Toronto-Dominion and Cerberus had been discussing a price of about $6 billion to $7 billion, other people with knowledge of the situation said earlier this month.

Canada’s second-largest bank has spent about $20 billion expanding in the U.S., including $7.1 billion for Cherry Hill, N.J.-based Commerce Bancorp Inc. in 2008, the bank’s biggest acquisition.

Canadian banks, ranked the soundest by the World Economic Forum for three straight years, are expanding abroad to add lower-priced assets after the worst financial crisis since the Great Depression. Bank of Montreal, the country’s fourth-largest bank, last week announced its biggest acquisition, agreeing to pay $4.1 billion in stock for Marshall & Ilsley Corp., the No. 1 bank in Wisconsin.

Mohammed Nakhooda, a Toronto-Dominion spokesman, declined to comment Monday. Cerberus spokesman Peter Duda also declined to comment.

Cerberus, led by founder Stephen Feinberg, wagered on the U.S. auto industry with takeovers of General Motors Corp.’s auto lender in 2006, followed by the Chrysler automaker and lender the following year. The deals preceded a decline in U.S. auto sales that sent both carmakers into bankruptcy protection.

Feinberg subsequently lost control of both GMAC and Chrysler and held on to Chrysler Financial. The lender repaid its $1.5 billion in U.S. Treasury Department bailout funds last year and in July sought to return to large-scale lending.

The automaker, known as Chrysler Group, is now controlled by managers from Italy’s Fiat.